In the economy in the above diagram, international trade:
A)does not occur.
B)has a contractionary effect on GDP.
C)has an expansionary effect on GDP.
D)has no impact on GDP.

Question

In the economy in the above diagram, international trade:
A)does not occur. 
B)has a contractionary effect on GDP. 
C)has an expansionary effect on GDP. 
D)has no impact on GDP.

Quizplus · Accepted Answer

International trade has an expansionary effect on GDP as it allows for increased exports and imports, leading to increased economic activity and potentially higher GDP.

In the Economy in the Above Diagram, International Trade